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New Discover Credit Card Offers Cash-Back Rewards And No Late-Payment Fees

The Discover 'it' card also comes with a good annual percentage rate.Discover is test-marketing a new credit card that combines its celebrated cash-back rewards program with no penalties if you’re late paying your bill.

Called simply “it,” the card is being tested in about 10% of the U.S. market, including Chicago.

Discover is positioning itself squarely against the competition, namely the Chase Freedom card, Bank Americard Cash Rewards, Capital One Cash Rewards and Citi Simplicity. Those cards provide generous rewards or no penalty fees, but not both.

Discover says “it” has all of the best features of all of those cards, plus more.

Here’s a look at the credit card details:

APR 10.99% to 19.99% variable; 0% for 15 months on purchases and balance transfers.
National Average APR 14.97% (source: CreditCards.com)
Annual Fee None
Rewards Up to 1% back on all spending, plus 5% back in quarterly rotating categories.
Verdict This card, which is only in testing, offers both rewards and no penalty fees or APRs for paying late. But you’ll probably need good credit to get approved.

Like Simplicity, there are no late fees on the first late payment, although you will get charged $35 if you’re late a second time. In addition, it promises not to raise your annual percentage rate if you are late.

There are also no over-limit fees.

Unlike Simplicity, though, which pays no rewards, Discover pays its famous up-to-1% cash reward on all spending, plus 5% on spending in quarterly rotating categories.

In addition, the APRs are quite reasonable: as low as 10.99% if you have excellent credit, up to 19.99% otherwise.

There’s also an introductory 0% APR on both purchases and balance transfers for 15 months, which is one of the longest periods we’ve seen. Balance transfer fees are a reasonable 3% of the balance.

With rates that low, it’s likely you’ll need good credit to qualify for this offer. And if you have good credit, you probably aren’t in the habit of making late payments.

In addition to these features, there are no foreign transaction fees, just like all Discover cards, and you can choose your own payment date.

You can also pay your bill by phone up to the last minute with no fee.

The only penalty fee is a $35 fee for returned payments, such as a bounced check, which seems fair.

What’s more, Discover says, “if you lose your job, we’ll find a way to help,” although it’s not specific about what that means.

You can find this card offer on www.discover.com.

Compare the terms of “it” with the cash-back credit card offers in our database.

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